I just started trading cryptocurrencies and I must say that when someone is new to the industry it can be very intimidating. Here are some things that I think a new trader should know and could benefit from.
Barriers to entry
Before you can start trading on an exchange like bittrex or poloniex you must buy the cryptocurrency. The most common and well-known one is Bitcoin. Then you must transfer that cryptocurrency to the exchange. The most common platform to use is coinbase. Coinbase makes it seem like your transactions will be instantaneous but most times they are not. You will also have to pay a fee to coinbase to first buy the currency and then a network fee to transfer the currency to the exchange. I would say to new investors to buy litecoin on coinbase and then after you transfer it to the exchange of your choice sell it and buy bitcoin. This will decrease the amount of fees that you will have to pay, but be ready to wait for the transactions usually can take some time, especially during instances of high volatility.
Volatility
From my experience thus far with the cryto market, I have noticed that it is extremely volatile. There are major moves in the range of 100% and above. This can be a good thing but you must have the stomach for it. There is a lot of money to be made and lost in this market. Make sure to do your research before investing and you MUST be willing to lose your entire investment.
Alternative Coins?
An alt coin is basically all other cryptocurrencies besides Bitcoin. The biggest ones include ethereum, litecoin, and bitcoin cash.
Margin Trading
I use to margin trade with forex and I would not recommend. I know that it can be an attractive proposition if you want to make money quick, but do not do it! This is a bull market. You want to be able to be in it as long as possible. Trust me, there is nothing worse than getting a margin call and having your trade and account liquidated.
Bitcoin is King
You must understand that Bitcoin is tied to all alt coins. It has the largest market cap of all the cryptocurrencies and has the ability to drastically change the direction of the market. Be sure to do your research on it, this is the only way that you can truly understand the weight of Bitcoin.
Research! Research! Research
You must research before you trade. I know when I first started trading I took the completely wrong approach. Now looking back I was more of a gambler than a trader. Do your research. This market is quite interesting and there are a lot of new things happening every day. Immerse yourself in it and soak it all up. It will benefit you in the long run. Look at site like coinigy,trading view, and reddit to learn more about the crypto market.
DISCLAIMER
I am not a financial advisor. Everything expressed are opions. Trade at your own risk!
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Some good tips you have there. I wish somebody gave me those when I was began my crypto-travel ;-)
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